Banking shares rebound post RBI policy

October 29, 2013 12:19 IST

Banking shares are trading higher by up to 2%, erasing there early morning losses, after the Reserve Bank of India reduced the marginal standing facility (MSF) rate by 25 basis points to 8.75% from 9%.

Banks usually tap the MSF rate during acute cash tightness.

The RBI also increased the liquidity provided through term repos of 7-day and 14-day tenor from 0.25% of net demand and time liability of the banking system to 0.5%

with immediate effect.

ICICI Bank, YES Bank, IndusInd Bank, Axis Bank, Union Bank of India, Bank of India and Punjab National Bank are trading higher by 2-3% on the National Stock Exchange.